The bullish case for Marvell Technology's stock is based partly on the fact that the company's end markets are experiencing "strong" growth, Kelleher said in the initiation note. (See the analyst's track record here.)

A digital transformation is taking place across PCs and smartphones that benefits Marvell's semiconductor-based solutions, Kelleher said. Segments like cloud, big data, social mobile, internet of things, robotics and artificial intelligence are similarly evolving, which creates incremental demand for Marvell's products.

"It would also add complementary assets in networking, DCI, connectivity and other areas with minimal overlaps in products, markets and customers," Kelleher said of the Cavium tie-up.

The acquisition would double Marvell's total addressable market and should prove to be immediately accretive to its non-GAAP EPS, the analyst said.

Marvell's expectations for stabilization in revenue, top-line growth and expanding margins should result in superior EPS growth potential versus its peers, Kelleher said. The stock "appears attractively valued" at current levels, he said.

Price Action

Marvell shares were up 0.62 percent at $23.72 Wednesday afternoon.

Related Links:

Can Semiconductors Get Their Groove Back In 2018? Here's Oppenheimer's Playbook